CSR entails corporate governance strategies that are employed by organisations that are ethical, societally friendly, and beneficial to its surrounding community.
Corporate social responsibility (CSR) refers to the strategies that organisations put into action as a part of governance processes that are designed to ensure the company’s operations are ethical and beneficial for society and environment.
What are the categories of CSR?
Corporate social responsibility is a broad concept that is understood and implemented differently by each company.
But the underpinning idea of CSR is to operate in an economically, socially, and environmentally sustainable way.
Generally, corporate social responsibility is divided into the following CSR categories:
1. Environmental responsibility
Environmental CSR initiatives aim at reducing pollution and greenhouse gas emissions, and the sustainable use of natural resources.
2. Human rights responsibility
Human rights CSR initiatives involve providing fair labor practices to employees.
This could be equal pay for equal work, it could include ensuring a diverse employee base, ensuring fair trade practices, ensuring safe work environment, and disavowing child labor.
3. Philanthropic responsibility
Philanthropic CSR initiatives typically include things such as funding educational programs for the underprivileged, supporting health initiatives, donating to charitable causes in close vicinity of the company’s operations, and supporting community initiatives.
4. Economic responsibility
Economic responsibility initiatives involve improving the company’s business operation while participating in sustainable practices – for example, using a new and greener manufacturing process to minimize wastage.
The benefits of CSR for society and environment are clear. But are there any benefits for the company itself?
Corporate social responsibility can be viewed as a public relations effort.
However, it goes beyond that, as corporate social responsibility can also help to increase a company’s competitiveness.
Today’s consumers are much more socially and environmentally conscious than previous generations.
As a result, consumers expect organisations to play their part to have sustainable business practices and get involved with the community and environment.
The business benefits of corporate social responsibility include the following:
1. Stronger brand reputation
Corporate socialresponsibility adds value to the organisation’s brand by establishing and maintaining a good corporate reputation and/or brand equity.
2. Increased customer loyalty and sales
Recent studies clearly show that companies with strong CSR practices have an edge compared to those that don’t.
Customers want products and services that they know don’t have any detrimental impact.
This will make them feel that they are helping the organisation support good causes.
3. Operational cost savings
Investing in operational efficiency will inevitably results in cost savings as well as reduced environmental impact.
4. Retaining key and talented employees
Employees of a company that is actively involved in CSR show higher retention.
They often stay longer and are more committed to their company, knowing that they are working for a business that practices CSR.
5. Easier access to funding
There is a growing trend in investors showing more willingness to support a business that practices CSR.
6. Reduced regulatory burden
Regulatory bodies continue to work on more stringent regulations for environmental and societal requirements for companies.
Complying with these regulations doesn’t only ensure that the organisation works towards better business practices, but it also forges a strong relationship with regulatory bodies which can help to ease regulatory burdens.
Is your company looking for the right corporate social responsibility strategy?
Are you looking to employ CSR as a business strategy?
Go to https://csr.theincitement.com to get started!